Nebraska’s TEEOSA formula reviewed; many allowances, new $1,500 foundation aid addition discussed

Legislative Research presented Nebraska’s school finance framework, the Tax Equity and Educational Opportunity Support Act (TEEOSA), describing a formula that computes state equalization aid as calculated needs minus calculated resources.

Calculated needs in TEEOSA include a wide range of system formula components: basic funding (computed using a comparison group of similarly sized districts and excluding the two highest and lowest comparison districts), poverty allowances, limited-English-proficiency allowances, focus-school/program allowances, summer-school, special receipts, transportation, elementary site and distance-education allowances, and a variety of adjustments (new-school, student-growth, averaging adjustments and corrections). Calculated resources include local effort yield, net option funding, allocated income tax funds, other actual receipts and community achievement plan aid. The presentation noted a 2023 statutory change that added a foundation aid payment equal to $1,500 per formula student; for the current school year a percentage of that foundation aid is required to be included as a formula resource and the percentage will be 60% beginning in FY26.

Rudder (presenting Nebraska material) described the mechanics for new-school and student-growth adjustments, focus-school allowances (used in learning communities), and application and approval processes for adjustments that districts must submit to the Department of Education. Committee members asked about focus schools (analogous to district-run specialized schools in learning communities), who pays transportation in cross-district learning-community arrangements (presenter and panel confirmed host/attending district arrangements and later reimbursement mechanics), and the variety of receipts used as formula resources. Staff said they would research items that required clarification, such as public power district receipts referenced in the memo.